Solar panels could allow residents in Wānaka to store power that would fuel the wider electricity network. (File photo)
A collaboration between an electricity lines company and a solar power provider in Wānaka may save millions of dollars locally and provide a new model for New Zealand’s electricity sector.
An agreement with SolarZero would allow Aurora Energy to defer spending up to $25 million on a new power line for several years, Aurora asset and planning general manager Glenn Coates said.
That cost would have fallen on customers who are already facing significant lines increases for overdue maintenance work.
It was also a move towards a low-carbon solution for power distribution, he said.
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“I think this will shift the whole conversation.
“It is leading the way on a model that could be extended to other pockets like this around the country that have similar isolation and geography,” Coates said.
Faced with massive ongoing growth in the Upper Clutha region, the traditional response from Aurora would have been to instal a third $25m distribution line from Central Otago to meet electricity demand, he said.
Instead, the company called for alternative options and selected a SolarZero proposal that would provide a virtual power plant in the region.
It would be fuelled by locals storing power sourced during non-peak periods in their home-based batteries, which could be distributed when required into the local network.
The goal was for the company to sign up enough customers with batteries to be able to provide a five per cent lift during peak power consumption from next winter.
It would ensure a more reliable supply and more efficient use of the power available, Coates said.
It would also enable Aurora Energy to defer building the expensive distribution line, perhaps indefinitely.
SolarZero director of public affairs and policy Eric Pyle said the idea of using distributed power storage had been around for a long time, but the technology had only recently become available to enable it to happen.
“This is a first for New Zealand in terms of using distributed battery resources and smart control,” he said.
“It’s a whole new way of thinking in the electricity industry.”
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A similar project started in New York in the 2000s to defer a billion-dollar infrastructure upgrade, and the upgrade was still being deferred a decade later, he said.
In time the system would also support the move into an electric economy in which New Zealand would be increasingly reliant on charging electric vehicles and other devices.
“Are we are going to double supply or get existing kit to operate more efficiently?” Pyle said.
There had already been a strong response in Wānaka, with many households signing up, he said.
He declined to give the cost of individual setups as it was commercially sensitive.
The company has operated a pre-pay system over 20 years, ensuring the combined monthly cost of the solar system and battery plus the electricity bill would be less than an existing electricity bill, he said.
Electricity Authority innovation and participation advisory group chairman John Hancock said it was an exciting step that was being keenly watched by others in the industry.
It had traditionally been cheaper to build big power stations and transfer electricity to where it was needed.
The cost of solar panels has dropped from millions of dollars 30 years ago to now being affordable for individual households, he said.
It has been predicted that in the next 30 years New Zealand will need to double its electricity generation to power electric vehicles, shift industrial bases from their reliance on coal and gas and replace old power stations.
Solar panels and batteries will play an important part in that shift, eventually providing 20 per cent of generation, he said.
For the maximum efficiencies to be realised under the existing system and the costs of new generation to be delayed and minimised, everyone needed to be following the Wānaka example, he said.
“It’s the first example of this happening anywhere in the country. That’s why it’s so exciting,” he said.